Assembly Biosciences Looks to Join the Percussion Section
- Posted by Greg Harmon
- on March 3rd, 2015
I first wrote about Assembly Biosciences in late January here. The stock was maintaining a consolidation channel but looked ready for a big move higher. I suggested that even if you did not want to watch it that you could put a standing order to buy on the break out. If you did then you can stop reading now as you are up 50% in the position. But if you didn’t you just may be in luck.
The chart above shows the move from 9 to 15 over a few days in mid February. A big move and it is absorbing that now. But in fact the last 8 days of consolidation has built a symmetrical triangle pattern. This pattern can break to the upside or downside, but when it follows a quick move higher the move is often to continue higher. The pattern looks for a move out of the triangle equal to the wide end of the triangle. This would be a move of $3.50 on the break out. If it goes to the upside that would target 17.75. But it would also trigger a Measured Move to 19.50 above that.
The RSI is bullish and has now worked off the overbought condition while the MACD is level. Should these hold it would also favor the upside. But the triangle can break either way. And a break down would also trigger a lucrative trade. This would look for a move to 10 but that close to the break out level one should not be surprised if it kept going to 9.
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)